5122:3-1-05
Requirements for project approval.

Each application for state funds shall contain documentation
demonstrating compliance or assurances of compliance with all applicable
requirements of this rule. State funding participation in a project shall be
disapproved for failure to provide necessary assurances or documentation. State
funding participation already approved for a project may be withdrawn for
failure to comply with the applicable assurances or requirements stated in this
rule.

(A)
Estate in real property: the
applicant must assure that it, or the approved tax credit owner for which it is
the approved tax credit manager, has or will have fee simple title to, and that
applicant or the approved tax credit owner for which it is the approved tax
credit manager will, prior to the state funding of any project costs, be in
lawful possession of the property on which the project is to be located,
including necessary easements and/or rights of way.

(B)
The applicant shall secure and submit to
the chief an appropriate resolution from the applicable board(s) stating
approval of the project by the board(s) and its or their intent to support and
monitor the program(s).

(1)
Sufficient
funds will be available to meet its share of project costs from project
initiation through project completion.

(2)
Sufficient funds and/or income from
sources made known to the department will be available as of the proposed
opening date to operate the facility in accordance with the approved
program(s).

(3)
Applicant will
execute the project in compliance with the guidelines.

(4)
The department,
and other state or federal
agencies, or their agents or designees, as appropriate, shall have access to
the project at any time while under construction and before final acceptance.

(5)
Applicant
will maintain adequate and separate accounting and fiscal records and
accounts for all funds provided from any source to pay the cost of an
individual project , and
permit departmental audit of such records and
accounts at any
reasonable time.

(6)
All buildings and
their contents shall be kept appropriately insured against loss by fire and
acts of God for such amounts which will assure sufficient funds to restore or
replace the buildings and contents. Such insurance shall include the department
as an additional insured to the extent of state participation and shall provide
that the department, through the chief, be promptly notified by the insurer of
any delinquency in insurance premium payments or cancellation of the policy.

(D)
The applicant agrees to use and maintain
the project for a period of years designated herein for the purposes stated in
the application unless otherwise agreed to in writing by the department
("project period"). If the project is not so used for the entire project
periodthe applicant: shall pay to the department at a
minimum, an amount equal to the total of any state funds reimbursed to the
applicant pursuant to approval of the project as stated in the application
times a fraction where the numerator is the number of months that the project
has operated as approved and the denominator is the total number of months in
the project period; or, shall permit the department to operate or transfer the
operation of the project, including the assignment of any contracts or other
interests, to another approved organization for the balance of the project
period. Such agreements shall be documented on such security instruments,
contracts, and other legal instruments as deemed necessary by the department to
secure state funds reimbursed by the department to the applicant for approved
project costs. The
project period shall be thirty years.

(1)
A nonprofit corporation
applicant, including an approved tax credit manager must meet the requirements
set forth below.

(2)
The articles
of incorporation must contain the following provisions in addition to those
otherwise required by law:

(a)
A specific
statement of purpose that the corporation will provide a mental health
or addiction service which will serve a public
purpose;

(b)
A provision that upon
dissolution of the corporation, if such dissolution occurs within the
thirty-year project period, the department
or its successor shall be a party to any judicial proceeding or dissolution
agreement and that the department or its successor may be a distributee under
such order or agreement to the extent of its participation and to the extent
provided by law or the participation agreement which originally set forth
disbursal of funds to the corporation;

(3)
The code of regulations or
bylaws, as applicable, shall contain the following provisions in addition to
those specifically provided by law:

(a)
A
provision limiting the number of terms and length
of term of office for trustees/directors and officers and prohibiting an
employee or officer of the corporation from being a trustee/director except
that in a general hospital or other facility where the mental health
or addiction service program is not the major
function of the facility, an employee of the corporation may be a
trustee/director but shall abstain from any vote of the board of
trustees/directors directly affecting the service program;

(b)
A provision stating that the board of
trustees/directors shall include representatives of the geographic community to
be served;

(c)
A provision that no
persons related by consanguinity or marriage (to a degree of first cousin)
shall constitute a majority of the board of trustees/directors; and

(d)
A provision to require the abstention of
a trustee/director in a vote on a matter affecting persons employed or to be
employed by the corporation and related to the trustee by consanguinity or
marriage.

(e)
A nondiscrimination provision stating that services
will neither be rendered nor denied on the basis of race, color, religion,
national origin, religion, disability, genetic information, military status,
sexual orientation, or, unless programmatically justifiable, age or sex;
and

(f)
A provision stating that the corporation will not
discriminate or otherwise decide any matter regarding employment on the basis
of race, color, national origin, religion, disability, genetic information,
military status, sexual orientation, age, or gender.

(1)
Appropriate documentation of the limited
partnership (partnership agreement) or limited liability company (articles of
incorporation; operating agreement) and the role that the approved tax credit
manager plays in the development and operation of the project.

(a)
A provision that
upon dissolution of the limited partnership or limited liability company, if
such dissolution occurs within the thirty-year
project period and another entity satisfactory to the
department has not assumed the obligations under the mortgage to the
department, the partnership agreement or operating agreement will provide that
all proceeds on dissolution be used to pay creditors of the limited partnership
or limited liability company, including any payment of amounts from the sale of
the project to pay the obligations secured by any mortgage to the department,
prior to distribution to any member or partner thereof.

(b)
A provision that, if the approved tax
credit manager should default in any term of the partnership or operating
agreement, upon notice to the applicant and the department, the applicant and
the department shall have a sixty-day period to cure such default.
Additionally, at the option of the department, and in the case where the
department determines that the applicant has failed to provide the services as
set forth in the application, unless otherwise agreed to in writing by the
department, the department may cause the management and operation of the
facility to be assigned to a party eligible to be an applicant or to the
department, provided such assignment is agreeable to the approved tax credit
owner, which agreement shall not be unreasonably withheld. Any such successor
manager or operator of the facility shall assume all of applicant's obligations
under the contract and note and shall comply with all federal or state
obligations and restrictions applicable to the facility.

(3)
Appropriate documentation that the
limited partnership or limited liability company is eligible to participate in
the Ohio housing finance agency's housing tax credit program.